How much costs information are we required to give to beneficiaries.
I am dealing with an intestate estate and my client has obtained letters of administration and one of the beneficiary’s wants a costs estimate. should I give a full breakdown or just an rough estimate or advise costs are an expenses of the estate and will be in the accounts in due course
I presume that you have had your client’s agreement to your terms of business. You need to ask your client if he/she is agreeable to you providing the other beneficiaries with copies.
The Legal ombudsman seem to disagree, I thought my contract was with my client. Apparently the beneficiary’s have a right to question my costs and I am obliged to disclose my costs estimate and any costs charged to the beneficiary’s even if this is not agreed by my client.
Rightly or wrongly, when a practitioner is employed by a Personal Representative to administer an estate the LO and the SRA have both determined that all the estate beneficiaries are ‘users of the law firm’s services’ and are therefore owed a duty of care. This needs to be borne in mind when deciding whether to impart or withhold information. It is, of course, fertile ground for a conflict of interest if the PR disagrees with the release of information and refuses to permit it…
rachel2, you are not required to give any costs information to a residuary beneficiary - but the Law Society says it is “good practice” and the Legal Ombudsman says “it would be prudent”.
I quoted the advice of the Law Society and a report from the Legal Ombusdman at greater length in this post in another thread:
The consensus seems to be that you should give costs information at the outset to all residuary beneficiaries - whether or not they want it.